Oil and Gas Pipeline Watch

Officials in Azerbaijan said work on oil and gas corridors in the region continue despite concerns over the impact of diversifying European energy supplies.

Azeri Energy Minister Natiq Aliyev said analysis expected to be concluded in November will give investors a better idea of the prospects of shipping oil and gas through Georgia and Ukraine, the Azerbaijan Business Center reported.

"We expect the attracted consultant to present the first project estimations, allowing us to make the initial conclusions about the perspectives of the transport corridor through Georgia and Ukraine and probably to Baltic countries," the minister said.

Azeri and Ukrainian officials had agreed to a test run of the 419-mile Odessa-Brody pipeline using oil from Azerbaijan.

"The idea has not been realized yet because of Ukraine, (which) still determines which direction it should choose for oil export. We are ready for trial deliveries to allow us estimating the ability of Ukrainian oil refineries to refine Azeri oil and sell oil products," Aliyev said.

Odessa-Brody has operated in the reverse direction, from Brody to Odessa, because of supply concerns, though that direction is being reconsidered.

A potential collapse of the pro-Western ruling coalition in Ukraine threatens any immediate developments, however, as former allies President Viktor Yushchenko and Prime Minister Yulia Tymoshenko sparred in part over operations through the pipeline.

Nabucco backers unfazed by conflict in Georgia.

The financial backers of the proposed 2,050-mile Nabucco gas pipeline say plans for the project are not affected by the geopolitical conflict in the Caucasus.

The Western-backed Nabucco natural gas pipeline will satisfy rising European energy demands by bringing natural gas from Azerbaijan and other regional sources to Turkey and on to Europe by 2013.

The Russian-Georgian conflict and aggressive energy moves by Moscow have prompted a closer look at energy diplomacy in Europe. Reinhard Mitschek, the head of the six-nation Nabucco consortium, said regional conflict has had little impact on the $11.63 billion project, The Financial Times reported.

"The Georgian conflict has no impact on Nabucco or its planning, which envisages first deliveries in 2013, so there is enough time to solve the political issues," Mitschek said.

Mitschek noted that Europe is facing a looming energy crisis, and various alternative routes to bring natural resources to the region remain in the best interest of the entire region.

"We are focused on developing the project properly. Nabucco is on track, and all partners are determined and fully committed to realize it," he said.

Nabucco faces criticism because of rising costs and supply concerns, but an August assessment of potential suppliers showed the project is adequately sourced.

"More than 100 percent booking from day one in 2013 shows huge demand," Mitschek said.

Meanwhile, Azerbaijan told U.S. Vice President Dick Cheney, however, that Baku was reluctant to back any plans to transport regional oil and gas through any route that bypasses Russia, Russian daily Kommersant reported.

Cheney was in the region last week to discuss the conflict in the Caucasus and regional energy supplies.

The decision by Azeri President Ilham Aliyev so frustrated the U.S. vice president that he skipped an official dinner held in his honor.

Azeri gas reserves will be a primary source for the Nabucco pipeline and several other projects supplying Europe, but pressure from Moscow may influence several of those routes.

Polish PM opposes Nord Stream.

Russian action against the breakaway Georgian republic of South Ossetia provokes a reconsideration of the Nord Stream gas pipeline, the Polish premier said.

Polish Prime Minister Donald Tusk called on German officials to review any support for the Nord Stream pipeline planned from Russia to Germany through the Baltic Sea, Polish Radio reported.

He questioned whether allowing Moscow to expand its energy role in Europe made strategic and political sense in the wake of the conflict in Georgia.

"We should give a clear signal by developing alternative sources of energy. Then Russia wouldn't be able to put any pressure on Europe," the Polish prime minister said.

The Polish government has voiced its opposition to the natural gas pipeline in part because it fails to explore conventional land routes through Ukraine, Slovakia and Poland.

Several European nations have opposed the construction of the natural gas pipeline because of the environmental impact of construction along the Baltic Sea floor.

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